Fourth Quarter Highlights
- Price-led organic growth and acquisition activity drive Q4
results above expectations and provide higher entry point into
2023
- Revenue of $1.869 billion, net
income(a) of $194.4
million, and adjusted EBITDA(b) of $563.6 million, or 30.2% of revenue, above
expectations
- Net income and adjusted net income(b) of
$0.75 and $0.89 per share, respectively
Full Year 2022 Highlights
- Revenue of $7.212 billion, up
17.2%
- Net income of $835.7 million,
or $3.24 per share, and adjusted net
income(b) of $985.3
million, or $3.82 per share,
up 18.3%
- Adjusted EBITDA(b) of $2.221 billion, up 15.7%, and 30.8% of revenue,
up 10 basis points year over year, excluding acquisitions
- Net cash provided by operating activities of $2.022 billion, up 19.1%, and adjusted free cash
flow(b) of $1.165 billion,
up 15.4%
- Completes acquisitions with approximately $640 million of total annualized revenue in
2022
Expectations for 2023
- Strong pricing and acquisition growth to drive both
double-digit percentage increase in revenue, and adjusted EBITDA*
margin expansion
- Revenue of approximately $8.05
billion, up 11.6%
- Net income of approximately $961
million and adjusted EBITDA(b) of approximately
$2.50 billion, or about 31.1% of
revenue
- Additional acquisitions, increases in recycled commodities
and renewable fuels values, or reduction of inflationary pressures
to provide upside to 2023 outlook
TORONTO, Feb. 15,
2023 /CNW/ -- Waste Connections, Inc. (TSX/NYSE: WCN)
("Waste Connections" or the "Company") today announced its results
for the fourth quarter of 2022 and outlook for 2023.
"Q4 topped off an extraordinary year for Waste Connections,
highlighted by continuing outperformance during the period and
providing a higher entry point and enhanced visibility for
2023. Strong operational execution and over 10% solid waste
pricing, along with acquisitions closed during the period, once
again provided for better than expected results. We more than
offset inflationary pressures and commodity-related headwinds to
expand adjusted EBITDA* margin by 30 basis points, excluding the
margin dilutive impact of acquisitions completed since the year-ago
period," said Worthing F. Jackman,
President and Chief Executive Officer.
"Looking at the full year, double-digit percentage growth in
both revenue and adjusted EBITDA, along with adjusted EBITDA margin
expansion excluding the impact of acquisitions, continued to
differentiate our results. We overcame elevated wage, fuel
and inflationary pressures, and a 70% drop in recycled commodity
values in the second half of the year, with an acceleration in
pricing during the year providing momentum for higher core pricing
in 2023. Moreover, we reported full year 2022 adjusted free
cash flow of $1.165 billion or 16.2%
of revenue, while navigating continuing uncertainties regarding
timing of manufacturer fleet deliveries and related payments,"
continued Mr. Jackman. "2022 acquisition activity also
outpaced expectations for a total of approximately $640 million in acquired annualized revenues,
which, along with activity year to date, already provides
acquisition contribution of 5% in 2023, with additional
dialogue ongoing."
Mr. Jackman concluded, "Our 2022 results are a testament to the
culture of accountability that has been integral to Waste
Connections' twenty-five year history of outperformance and value
creation. The tireless efforts of our over 22,000 dedicated
employees have positioned us for double-digit revenue growth and
additional adjusted EBITDA margin expansion in 2023 in spite of an
expected 100 basis points margin headwind at current recovered
commodity values, with upside from any improvement in these values
or inflationary pressures, as well as any additional acquisition
activity."
Q4 2022 Results
Revenue in the fourth quarter totaled $1.869 billion, up from $1.624 billion in the year ago period.
Operating income was $312.0 million, which included $4.7 million primarily in transaction-related
expenses. This compares to operating income of $249.3 million in the fourth quarter of 2021,
which included $28.4 million
primarily related to impairments and other transaction-related
expenses. Net income in the fourth quarter was $194.4 million, or $0.75 per share on a diluted basis of 258.0
million shares. In the year ago period, the Company reported
net income of $166.3 million, or
$0.64 per share on a diluted basis of
261.3 million shares.
Adjusted net income(b) in the fourth quarter was
$229.8 million, or $0.89 per diluted share, up from $217.1 million, or $0.83 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the fourth quarter
was $563.6 million, as compared to
$495.4 million in the prior year
period. Adjusted net income, adjusted net income per diluted
share and adjusted EBITDA, all non-GAAP measures, primarily exclude
impairments and transaction-related items, as reflected in the
detailed reconciliations in the attached tables.
Full Year 2022 Results
For the year ended December 31,
2022, revenue was $7.212
billion, up from $6.151
billion in the year ago period. Operating income,
which included $43.2 million
primarily attributable to transaction-related expenses and
impairments and other operating items, was $1.242 billion, as compared to operating income
of $1.040 billion in 2021, which
included $52.0 million in impairments
and other operating items, fair value changes in equity awards and
transaction-related expenses.
Net income for the year ended December
31, 2022 was $835.7 million,
or $3.24 per share on a diluted basis
of 258.0 million shares, including a $16.4
million net of tax benefit, or $0.06 per share, primarily as a result of the
impact from changes in foreign currency exchange rates on certain
debt. In the year ago period, the Company reported net income
of $618.0 million, or $2.36 per share on a diluted basis of 261.7
million shares.
Adjusted net income(b) for the year ended
December 31, 2022 was $985.3 million, or $3.82 per diluted share, as compared to
$846.6 million, or $3.23 per diluted share, in the year ago period.
Adjusted EBITDA(b) for the year ended December 31, 2022 was $2.221 billion, up from $1.919 billion in the prior year period.
2023 Outlook
Waste Connections also announced its outlook for 2023, which
assumes no change in the current economic environment. The
Company's outlook excludes any impact from additional acquisitions
that may close during the year, and expensing of
transaction-related items. The outlook provided below is
forward looking, and actual results may differ materially depending
on risks and uncertainties detailed at the end of this release and
in our periodic filings with the U.S. Securities and Exchange
Commission and the securities commissions or similar regulatory
authorities in Canada. Certain
components of the outlook for 2023 are subject to quarterly
fluctuations. See reconciliations in the attached tables.
- Revenue is estimated at approximately $8.050 billion;
- Net income is estimated at approximately $961 million;
- Adjusted EBITDA(b) is estimated at approximately
$2.500 billion, or about 31.1% of
revenue;
- Net cash provided by operating activities is estimated at
approximately $2.120 billion;
- Capital expenditures are estimated at $925 million, including $50 million in delayed fleet deliveries from the
prior year; proceeds from disposal of assets are estimated at
$30 million; and
- Adjusted free cash flow(b) is estimated at
$1.225 billion.
----------------------------------------------------------------------------------------------------------------------------------------------------
|
(a) All references to
"Net income" refer to the financial statement line item "Net income
attributable to Waste Connections".
|
(b) A non-GAAP measure;
see accompanying Non-GAAP Reconciliation Schedule.
|
Q4 2022 Earnings Conference Call
Waste Connections will be hosting a conference call related to
fourth quarter earnings on February
16th at 8:30 A.M. Eastern
Time. A live audio webcast of the conference call can
be accessed by visiting investors.wasteconnections.com and
selecting "News & Events" from the website menu. Alternatively,
conference call participants can preregister by clicking
here. Registered participants will receive dial-in
instructions and a personalized code for entry to the conference
call. A replay of the conference call will be available until
February 23, 2023, by calling
877-344-7529 (within North
America) or 412-317-0088 (international) and entering
Passcode #1793448.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
February 16th, providing
the Company's first quarter 2023 outlook for revenue, price plus
volume growth for solid waste, and adjusted
EBITDA(b).
About Waste Connections
Waste Connections is an integrated solid waste services company
that provides non-hazardous waste collection, transfer and disposal
services, along with resource recovery primarily through recycling
and renewable fuels generation. The Company serves more than
eight million residential, commercial and industrial customers in
mostly exclusive and secondary markets across 43 states in the U.S.
and six provinces in Canada. Waste Connections also provides
non-hazardous oilfield waste treatment, recovery and disposal
services in several basins across the U.S., as well as intermodal
services for the movement of cargo and solid waste containers in
the Pacific Northwest. For more information, visit Waste
Connections at wasteconnections.com.
Environmental, Social and Governance
Waste Connections views its Environmental, Social and Governance
("ESG") efforts as integral to its business, with initiatives
consistent with its objective of long-term value creation. In
2020, the Company introduced long-term, aspirational ESG targets
and committed over $500 million for
investments to meet or exceed such sustainability targets. These
investments primarily focus on reducing emissions, increasing
resource recovery of both recyclable commodities and clean energy
fuels, reducing reliance on off-site disposal for landfill
leachate, further improving safety and enhancing employee
engagement. The Company's 2022 Sustainability Report provides
progress updates on its targets and investments towards their
achievement, and introduces new emissions reduction targets.
For more information, visit
wasteconnections.com/sustainability.
Safe Harbor and Forward-Looking Information
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995 ("PSLRA"), including
"forward-looking information" within the meaning of applicable
Canadian securities laws. These forward-looking statements are
neither historical facts nor assurances of future performance and
reflect Waste Connections' current beliefs and expectations
regarding future events and operating performance. These
forward-looking statements are often identified by the words "may,"
"might," "believes," "thinks," "expects," "estimate," "continue,"
"intends" or other words of similar meaning. All of the
forward-looking statements included in this press release are made
pursuant to the safe harbor provisions of the PSLRA and applicable
securities laws in Canada.
Forward-looking statements involve risks and uncertainties.
Forward-looking statements in this press release include, but are
not limited to, statements about expected 2023 financial results,
outlook and related assumptions, and potential acquisition
activity. Important factors that could cause actual results to
differ, possibly materially, from those indicated by the
forward-looking statements include, but are not limited to, risk
factors detailed from time to time in the Company's filings with
the SEC and the securities commissions or similar regulatory
authorities in Canada. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
press release. Waste Connections undertakes no obligation to
update the forward-looking statements set forth in this press
release, whether as a result of new information, future events, or
otherwise, unless required by applicable securities laws.
– financial tables attached –
CONTACT:
|
|
Mary Anne Whitney /
(832) 442-2253
|
Joe Box / (832)
442-2153
|
maryannew@wasteconnections.com
|
joe.box@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
NET INCOME
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2021 AND
2022
(Unaudited)
(in thousands of U.S. dollars, except
share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,624,319
|
|
$
|
1,869,302
|
|
$
|
6,151,361
|
|
$
|
7,211,859
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
|
980,865
|
|
|
1,137,973
|
|
|
3,654,074
|
|
|
4,336,012
|
|
Selling, general and
administrative
|
|
|
157,452
|
|
|
177,763
|
|
|
612,337
|
|
|
696,467
|
|
Depreciation
|
|
|
175,142
|
|
|
201,111
|
|
|
673,730
|
|
|
763,285
|
|
Amortization of
intangibles
|
|
|
39,042
|
|
|
41,719
|
|
|
139,279
|
|
|
155,675
|
|
Impairments and other
operating items
|
|
|
22,497
|
|
|
(1,237)
|
|
|
32,316
|
|
|
18,230
|
|
Operating
income
|
|
|
249,321
|
|
|
311,973
|
|
|
1,039,625
|
|
|
1,242,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(38,625)
|
|
|
(64,766)
|
|
|
(162,796)
|
|
|
(202,331)
|
|
Interest
income
|
|
|
573
|
|
|
3,376
|
|
|
2,916
|
|
|
5,950
|
|
Other income,
net
|
|
|
833
|
|
|
781
|
|
|
6,285
|
|
|
3,154
|
|
Loss on early
extinguishment of debt
|
|
|
-
|
|
|
-
|
|
|
(115,288)
|
|
|
-
|
|
Income before income
tax provision
|
|
|
212,102
|
|
|
251,364
|
|
|
770,742
|
|
|
1,048,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(45,675)
|
|
|
(57,063)
|
|
|
(152,253)
|
|
|
(212,962)
|
|
Net income
|
|
|
166,427
|
|
|
194,301
|
|
|
618,489
|
|
|
836,001
|
|
Plus/(less): Net loss
(income) attributable to noncontrolling
interests
|
|
|
(117)
|
|
|
51
|
|
|
(442)
|
|
|
(339)
|
|
Net income attributable
to Waste Connections
|
|
$
|
166,310
|
|
$
|
194,352
|
|
$
|
618,047
|
|
$
|
835,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.64
|
|
$
|
0.76
|
|
$
|
2.37
|
|
$
|
3.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.64
|
|
$
|
0.75
|
|
$
|
2.36
|
|
$
|
3.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
260,547,806
|
|
|
257,219,843
|
|
|
261,166,723
|
|
|
257,383,578
|
|
Diluted
|
|
|
261,258,425
|
|
|
257,974,749
|
|
|
261,728,470
|
|
|
258,038,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.23
|
|
$
|
0.255
|
|
$
|
0.845
|
|
$
|
0.945
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands of U.S. dollars, except
share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
December 31,
2021
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
147,441
|
|
$
|
78,637
|
|
Accounts receivable,
net of allowance for credit losses of $18,480 and $22,939 at
December 31, 2021 and 2022, respectively
|
|
|
709,614
|
|
|
833,862
|
|
Prepaid expenses and
other current assets
|
|
|
175,722
|
|
|
205,146
|
|
Total current
assets
|
|
|
1,032,777
|
|
|
1,117,645
|
|
Restricted
cash
|
|
|
72,174
|
|
|
102,727
|
|
Restricted
investments
|
|
|
59,014
|
|
|
68,099
|
|
Property and equipment,
net
|
|
|
5,721,949
|
|
|
6,950,915
|
|
Operating lease
right-of-use assets
|
|
|
160,567
|
|
|
192,506
|
|
Goodwill
|
|
|
6,187,643
|
|
|
6,902,297
|
|
Intangible assets,
net
|
|
|
1,350,597
|
|
|
1,673,917
|
|
Other assets,
net
|
|
|
115,203
|
|
|
126,497
|
|
Total
assets
|
|
$
|
14,699,924
|
|
$
|
17,134,603
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
392,868
|
|
$
|
638,728
|
|
Book
overdraft
|
|
|
16,721
|
|
|
15,645
|
|
Deferred
revenue
|
|
|
273,720
|
|
|
325,002
|
|
Accrued
liabilities
|
|
|
442,596
|
|
|
431,247
|
|
Current portion of
operating lease liabilities
|
|
|
38,017
|
|
|
35,170
|
|
Current portion of
contingent consideration
|
|
|
62,804
|
|
|
60,092
|
|
Current portion of
long-term debt and notes payable
|
|
|
6,020
|
|
|
6,759
|
|
Total current
liabilities
|
|
|
1,232,746
|
|
|
1,512,643
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
5,040,500
|
|
|
6,890,149
|
|
Long-term portion of
operating lease liabilities
|
|
|
129,628
|
|
|
165,462
|
|
Long-term portion of
contingent consideration
|
|
|
31,504
|
|
|
21,323
|
|
Deferred income
taxes
|
|
|
850,921
|
|
|
1,013,742
|
|
Other long-term
liabilities
|
|
|
421,080
|
|
|
417,640
|
|
Total
liabilities
|
|
|
7,706,379
|
|
|
10,020,959
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
260,283,158 shares issued and 260,212,496 shares outstanding at
December 31, 2021; 257,211,175 shares issued and 257,145,716
shares outstanding at
December 31, 2022
|
|
|
3,693,027
|
|
|
3,271,958
|
|
Additional paid-in
capital
|
|
|
199,482
|
|
|
244,076
|
|
Accumulated other
comprehensive income (loss)
|
|
|
39,584
|
|
|
(56,830)
|
|
Treasury shares: 70,662
and 65,459 shares at December 31, 2021 and 2022,
respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
3,056,845
|
|
|
3,649,494
|
|
Total Waste
Connections' equity
|
|
|
6,988,938
|
|
|
7,108,698
|
|
Noncontrolling interest
in subsidiaries
|
|
|
4,607
|
|
|
4,946
|
|
Total
equity
|
|
|
6,993,545
|
|
|
7,113,644
|
|
Total
liabilities and equity
|
|
$
|
14,699,924
|
|
$
|
17,134,603
|
|
WASTE
CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2021 AND 2022
(Unaudited)
(in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Twelve
months ended December 31,
|
|
|
|
2021
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
618,489
|
|
$
|
836,001
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
27,727
|
|
|
9,519
|
|
Depreciation
|
|
|
673,730
|
|
|
763,285
|
|
Amortization of
intangibles
|
|
|
139,279
|
|
|
155,675
|
|
Loss on early
extinguishment of debt
|
|
|
115,288
|
|
|
-
|
|
Deferred income taxes,
net of acquisitions
|
|
|
14,563
|
|
|
93,481
|
|
Current period
provision for expected credit losses
|
|
|
9,719
|
|
|
17,353
|
|
Amortization of debt
issuance costs
|
|
|
5,055
|
|
|
5,454
|
|
Share-based
compensation
|
|
|
58,221
|
|
|
63,485
|
|
Interest
accretion
|
|
|
15,970
|
|
|
17,668
|
|
Payment of contingent
consideration recorded in earnings
|
|
|
(520)
|
|
|
(2,982)
|
|
Adjustments to
contingent consideration
|
|
|
2,954
|
|
|
(1,030)
|
|
Other
|
|
|
(1,260)
|
|
|
(8,217)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
19,014
|
|
|
72,800
|
|
Net cash provided by
operating activities
|
|
|
1,698,229
|
|
|
2,022,492
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(960,449)
|
|
|
(2,206,901)
|
|
Capital expenditures
for property and equipment
|
|
|
(744,315)
|
|
|
(912,677)
|
|
Investment in
noncontrolling interests
|
|
|
(25,000)
|
|
|
-
|
|
Proceeds from disposal
of assets
|
|
|
42,768
|
|
|
30,676
|
|
Other
|
|
|
(6,486)
|
|
|
1,731
|
|
Net cash used in
investing activities
|
|
|
(1,693,482)
|
|
|
(3,087,171)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
2,112,193
|
|
|
4,816,146
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(1,893,100)
|
|
|
(3,073,985)
|
|
Premiums paid on early
extinguishment of debt
|
|
|
(110,617)
|
|
|
-
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(12,934)
|
|
|
(16,911)
|
|
Change in book
overdraft
|
|
|
(367)
|
|
|
(1,076)
|
|
Payments for
repurchase of common shares
|
|
|
(338,993)
|
|
|
(424,999)
|
|
Payments for cash
dividends
|
|
|
(220,203)
|
|
|
(243,013)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(18,606)
|
|
|
(18,358)
|
|
Debt issuance
costs
|
|
|
(18,521)
|
|
|
(13,271)
|
|
Proceeds from issuance
of shares under employee share purchase plan
|
|
|
1,222
|
|
|
3,270
|
|
Proceeds from sale of
common shares held in trust
|
|
|
430
|
|
|
660
|
|
Net cash provided by
(used in) financing activities
|
|
|
(499,496)
|
|
|
1,028,463
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
(25)
|
|
|
(2,035)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
|
(494,774)
|
|
|
(38,251)
|
|
Cash, cash equivalents
and restricted cash at beginning of year
|
|
|
714,389
|
|
|
219,615
|
|
Cash, cash equivalents
and restricted cash at end of year
|
|
$
|
219,615
|
|
$
|
181,364
|
|
ADDITIONAL STATISTICS
(in thousands of
U.S. dollars, except where noted)
Solid Waste Internal Growth: The following table
reflects a breakdown of the components of our solid waste internal
growth for the three and twelve month periods ended December 31, 2022:
|
|
Three months
ended
December 31,
2022
|
|
Twelve months
ended
December 31,
2022
|
Core Price
|
|
|
9.0 %
|
|
|
7.7 %
|
Surcharges
|
|
|
1.6 %
|
|
|
1.5 %
|
Volume
|
|
|
(2.5 %)
|
|
|
(1.1 %)
|
Recycling
|
|
|
(2.9 %)
|
|
|
(0.7 %)
|
Foreign Exchange
Impact
|
|
|
(0.9 %)
|
|
|
(0.5 %)
|
Total
|
|
|
4.3 %
|
|
|
6.9 %
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
December 31, 2021 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended December 31, 2021
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,169,428
|
|
$
|
(2,780)
|
|
$
|
1,166,648
|
|
71.8
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
533,122
|
|
|
(216,957)
|
|
|
316,165
|
|
19.5
|
%
|
Solid Waste
Recycling
|
|
|
75,317
|
|
|
(5,646)
|
|
|
69,671
|
|
4.3
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
37,570
|
|
|
(3,244)
|
|
|
34,326
|
|
2.1
|
%
|
Intermodal and
Other
|
|
|
39,592
|
|
|
(2,083)
|
|
|
37,509
|
|
2.3
|
%
|
Total
|
|
$
|
1,855,029
|
|
$
|
(230,710)
|
|
$
|
1,624,319
|
|
100.0
|
%
|
|
|
Three months
ended December 31, 2022
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,385,682
|
|
$
|
(6,093)
|
|
$
|
1,379,589
|
|
73.8
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
619,176
|
|
|
(254,381)
|
|
|
364,795
|
|
19.5
|
%
|
Solid Waste
Recycling
|
|
|
26,031
|
|
|
(496)
|
|
|
25,535
|
|
1.4
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
55,857
|
|
|
(3,296)
|
|
|
52,561
|
|
2.8
|
%
|
Intermodal and
Other
|
|
|
48,865
|
|
|
(2,043)
|
|
|
46,822
|
|
2.5
|
%
|
Total
|
|
$
|
2,135,611
|
|
$
|
(266,309)
|
|
$
|
1,869,302
|
|
100.0
|
%
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three and twelve month periods ended December 31, 2021 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
Acquisitions,
net
|
|
$
|
79,363
|
|
$
|
149,994
|
|
$
|
215,398
|
|
$
|
552,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL STATISTICS (continued)
(in
thousands of U.S. dollars, except where noted)
Other Cash Flow Items: The following table reflects cash
interest and cash taxes for the three and twelve month periods
ended December 31, 2021 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
Cash Interest
Paid
|
|
$
|
36,839
|
|
$
|
58,883
|
|
$
|
157,485
|
|
$
|
177,424
|
Cash Taxes
Paid
|
|
|
56,094
|
|
|
46,556
|
|
|
146,198
|
|
|
100,156
|
Debt to Book Capitalization as of December 31, 2022: 49%
Internalization for the three months ended
December 31, 2022: 54%
Days Sales Outstanding for the three months ended
December 31, 2022: 41 (25
net of deferred revenue)
Share Information for the three months ended December 31, 2022:
|
|
|
Basic shares
outstanding
|
|
257,219,843
|
Dilutive effect of
equity-based awards
|
|
754,906
|
Diluted shares
outstanding
|
|
257,974,749
|
NON-GAAP RECONCILIATION SCHEDULE
(in
thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted EBITDA:
Adjusted EBITDA, a non-GAAP financial measure, is provided
supplementally because it is widely used by investors as a
performance and valuation measure in the solid waste
industry. Management uses adjusted EBITDA as one of the
principal measures to evaluate and monitor the ongoing financial
performance of Waste Connections' operations. Waste
Connections defines adjusted EBITDA as net income attributable to
Waste Connections, plus or minus net income (loss) attributable to
noncontrolling interests, plus income tax provision, plus interest
expense, less interest income, plus depreciation and amortization
expense, plus closure and post-closure accretion expense, plus or
minus any loss or gain on impairments and other operating items,
plus other expense, less other income, plus loss on early
extinguishment of debt. Waste Connections further adjusts
this calculation to exclude the effects of other items management
believes impact the ability to assess the operating performance of
its business. This measure is not a substitute for, and
should be used in conjunction with, GAAP financial measures.
Other companies may calculate adjusted EBITDA
differently.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
Net income attributable
to Waste Connections
|
|
$
|
166,310
|
|
$
|
194,352
|
|
$
|
618,047
|
|
$
|
835,662
|
Plus/(Less): Net income
(loss) attributable to noncontrolling interests
|
|
|
117
|
|
|
(51)
|
|
|
442
|
|
|
339
|
Plus: Income tax
provision
|
|
|
45,675
|
|
|
57,063
|
|
|
152,253
|
|
|
212,962
|
Plus: Interest
expense
|
|
|
38,625
|
|
|
64,766
|
|
|
162,796
|
|
|
202,331
|
Less: Interest
income
|
|
|
(573)
|
|
|
(3,376)
|
|
|
(2,916)
|
|
|
(5,950)
|
Plus: Depreciation and
amortization
|
|
|
214,184
|
|
|
242,830
|
|
|
813,009
|
|
|
918,960
|
Plus: Closure and
post-closure accretion
|
|
|
3,579
|
|
|
4,105
|
|
|
14,497
|
|
|
16,253
|
Plus/(Less):
Impairments and other operating items
|
|
|
22,497
|
|
|
(1,237)
|
|
|
32,316
|
|
|
18,230
|
Less: Other income,
net
|
|
|
(833)
|
|
|
(781)
|
|
|
(6,285)
|
|
|
(3,154)
|
Plus: Loss on
early extinguishment of debt
|
|
|
-
|
|
|
-
|
|
|
115,288
|
|
|
-
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
5,098
|
|
|
6,239
|
|
|
11,318
|
|
|
24,933
|
Plus/(Less): Fair
value changes to equity awards(b)
|
|
|
755
|
|
|
(263)
|
|
|
8,393
|
|
|
86
|
Adjusted
EBITDA
|
|
$
|
495,434
|
|
$
|
563,647
|
|
$
|
1,919,158
|
|
$
|
2,220,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
30.5 %
|
|
|
30.2 %
|
|
|
31.2 %
|
|
|
30.8 %
|
|
|
____________________________
|
(a)
|
Reflects the addback of
acquisition-related transaction costs.
|
(b)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except where
noted)
Reconciliation of Adjusted Free Cash Flow:
Adjusted free cash flow, a non-GAAP financial measure, is
provided supplementally because it is widely used by investors as a
valuation and liquidity measure in the solid waste industry.
Management uses adjusted free cash flow as one of the principal
measures to evaluate and monitor the ongoing financial performance
of Waste Connections' operations. Waste Connections defines
adjusted free cash flow as net cash provided by operating
activities, plus or minus change in book overdraft, plus proceeds
from disposal of assets, less capital expenditures for property and
equipment and distributions to noncontrolling interests.
Waste Connections further adjusts this calculation to exclude the
effects of items management believes impact the ability to assess
the operating performance of its business. This measure is
not a substitute for, and should be used in conjunction with, GAAP
liquidity or financial measures. Other companies may
calculate adjusted free cash flow differently.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended
December 31,
|
|
|
|
|
2021
|
|
2022
|
|
Net cash provided by
operating activities
|
|
|
$
|
1,698,229
|
|
$
|
2,022,492
|
|
Less: Change in book
overdraft
|
|
|
|
(367)
|
|
|
(1,076)
|
|
Plus: Proceeds from
disposal of assets
|
|
|
|
42,768
|
|
|
30,676
|
|
Less: Capital
expenditures for property and equipment
|
|
|
|
(744,315)
|
|
|
(912,677)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Payment of
contingent consideration recorded in
earnings(a)
|
|
|
|
520
|
|
|
2,982
|
|
Cash received for
divestitures(b)
|
|
|
|
(17,118)
|
|
|
(5,671)
|
|
Transaction-related
expenses(c)
|
|
|
|
30,771
|
|
|
30,825
|
|
Pre-existing
Progressive Waste share-based grants(d)
|
|
|
|
397
|
|
|
286
|
|
Tax
effect(e)
|
|
|
|
(1,287)
|
|
|
(2,993)
|
|
Adjusted free cash
flow
|
|
|
$
|
1,009,598
|
|
$
|
1,164,844
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
|
16.4 %
|
|
|
16.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________
|
(a)
|
Reflects the addback of
acquisition-related payments for contingent consideration that were
recorded as expenses in earnings and as a component of
cash flows from operating activities as the amounts paid exceeded
the fair value of the contingent consideration recorded at the
acquisition date.
|
(b)
|
Reflects the
elimination of cash received in conjunction with the divestiture of
certain operations.
|
(c)
|
Reflects the addback of
acquisition-related transaction costs and the settlement of an
acquired tax liability.
|
(d)
|
Reflects the cash
settlement of pre-existing Progressive Waste share-based awards
during the period.
|
(e)
|
The aggregate tax
effect of footnotes (a) through (d) is calculated based on the
applied tax rates for the respective periods.
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except per share
amounts)
Reconciliation of Adjusted Net Income attributable to Waste
Connections and Adjusted Net Income per Diluted Share attributable
to Waste Connections:
Adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections, both non-GAAP financial measures, are provided
supplementally because they are widely used by investors as a
valuation measure in the solid waste industry. Management
uses adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections as one of the principal measures to evaluate and
monitor the ongoing financial performance of Waste Connections'
operations. Waste Connections provides adjusted net income
attributable to Waste Connections to exclude the effects of items
management believes impact the comparability of operating results
between periods. Adjusted net income attributable to Waste
Connections has limitations due to the fact that it excludes items
that have an impact on the Company's financial condition and
results of operations. Adjusted net income attributable to
Waste Connections and adjusted net income per diluted share
attributable to Waste Connections are not a substitute for, and
should be used in conjunction with, GAAP financial measures.
Other companies may calculate these non-GAAP financial measures
differently.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
Reported net income
attributable to Waste Connections
|
|
$
|
166,310
|
|
$
|
194,352
|
|
$
|
618,047
|
|
$
|
835,662
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
39,042
|
|
|
41,719
|
|
|
139,279
|
|
|
155,675
|
Impairments and other
operating items(b)
|
|
|
22,497
|
|
|
(1,237)
|
|
|
32,316
|
|
|
18,230
|
Transaction-related
expenses(c)
|
|
|
5,098
|
|
|
6,239
|
|
|
11,318
|
|
|
24,933
|
Fair value changes to
equity awards(d)
|
|
|
755
|
|
|
(263)
|
|
|
8,393
|
|
|
86
|
Loss on early
extinguishment of debt(e)
|
|
|
-
|
|
|
-
|
|
|
115,288
|
|
|
-
|
Tax
effect(f)
|
|
|
(16,574)
|
|
|
(11,053)
|
|
|
(78,041)
|
|
|
(49,312)
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
217,128
|
|
$
|
229,757
|
|
$
|
846,600
|
|
$
|
985,274
|
Diluted earnings per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.64
|
|
$
|
0.75
|
|
$
|
2.36
|
|
$
|
3.24
|
Adjusted net
income
|
|
$
|
0.83
|
|
$
|
0.89
|
|
$
|
3.23
|
|
$
|
3.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________
|
(a)
|
Reflects the
elimination of the non-cash amortization of acquisition-related
intangible assets.
|
(b)
|
Reflects adjustments
for impairments and other operating items.
|
(c)
|
Reflects the addback of
acquisition-related transaction costs.
|
(d)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
(e)
|
Reflects the make-whole
premium and related fees associated with the early termination of
$1.5 billion in senior notes.
|
(f)
|
The aggregate tax
effect of the adjustments in footnotes (a) through (e) is
calculated based on the applied tax rates for the respective
periods.
|
2023 OUTLOOK
NON-GAAP RECONCILIATION
SCHEDULE
(in thousands of U.S. dollars, except where
noted)
Reconciliation of Adjusted EBITDA:
|
|
|
2023 Outlook
|
|
|
|
Estimates
|
|
Observation
|
Net income attributable
to Waste Connections
|
|
$
|
961,000
|
|
|
Plus: Net income attributable to noncontrolling
interests
|
|
|
1,000
|
|
|
Plus: Income tax provision
|
|
|
271,000
|
|
Approximate 22.0%
effective rate
|
Plus: Interest expense, net
|
|
|
255,000
|
|
|
Plus: Depreciation and Depletion
|
|
|
842,000
|
|
Approximately 10.5% of
revenue
|
Plus: Amortization
|
|
|
153,000
|
|
|
Plus: Closure and post-closure accretion
|
|
|
17,000
|
|
|
Adjusted
EBITDA
|
|
$
|
2,500,000
|
|
Approximately 31.1% of
revenue
|
Reconciliation of Adjusted Free Cash Flow:
|
|
|
|
|
|
2023 Outlook
Estimates
|
Net cash provided by
operating activities
|
|
$
|
2,120,000
|
Less: Capital expenditures, net(a)
|
|
|
(895,000)
|
Adjusted free cash
flow
|
|
$
|
1,225,000
|
|
____________________________
|
(a) Reflects
proceeds from disposal of assets estimated at $30 million; capital
expenditures of $925 million includes $50 million in delayed fleet
deliveries
from the prior year.
|
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SOURCE Waste Connections, Inc.